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IBusiness WeekI includes SECUs Blaine on credit scores
RALEIGH, N.C. (2/18/08)--James C. Blaine, CEO of State Employees’ CU (SECU) in Raleigh, N.C., was quoted in an article in the Feb. 18 issue of BusinessWeek, focusing on lending industry standards and consumer credit scores. Blaine, who oversees the needs of 1.4 million members in his $14.95 billion asset credit union, told the magazine in the article, “Sinking Credit,” by Peter Coy, that he favors a more equitable process, other than credit scores, as a yardstick for issuing loans. All SECU members who meet the credit union’s underwriting standards get the same flat rate--now 6.25%--regardless of their credit history, Blaine told the magazine. “You shouldn’t abuse a good [people] just because they don’t understand the financial system,” Blaine said in the interview, adding that subprime borrowers default because of high interest rates, not FICO scores. There’s not much difference between his credit union’s borrowers with the lowest scores and those with the highest, he said. Of these members who would be traditionally classified as subprime borrowers, 1.25% defaulted on their home loans, which is below the 7% that analysts expect at larger lenders such as Washington Mutual, according to Business Week.
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